Blistering sales pace as Chrysler booms; GM, Ford ease

Auto sales in August were unexpectedly strong, with Ford and Chrysler handily beating analysts' expectations. Ford reported sales climbed 0.4% to 222,174 vehicles, making it the best August sales in eight years.
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"Chrysler's been able to keep it going by diving into the sub-prime market more aggressively than other automakers and by jumping into the leasing game after it barely stepped onto the playing field while it worked its way out of bankruptcy."

Sub-prime refers to loans made to borrowers who have lower than top-notch credit scores. The loans tend to get riskier the further down the credit-score scale a lender is willing to go to make a loan.

Leasing can be risky if an automaker artificially inflates what it expects a a vehicle will be worth at lease-end, to keep the lease payments low. That sets up the car company or lender to swallow the difference between that artificially high trade-in value it assigned, and the actual market value -- the amount it could get for the used car or truck by reselling it as a used vehicle or selling it wholesale at a dealer auction.

Beyond those considerations, Caldwell says, "Chrysler has found a real winner with the Jeep Cherokee, which has become one of its biggest sellers in the white-hot small SUV segment."

Trucks and SUVs account for 76.7% of total Chrysler Group sales this year through August. The Cherokee compact SUV, on sale since last October after a four-month delay, contributed more than 18,000 August sales that the automaker otherwise wouldn't have had.

Industry-wide, trucks, vans and SUVs account for 51% of new-vehicle sales this year./

General Motors August sales fell 1.2% on big declines at its Buick and Cadillac brands, but truck sales overall jumped 18% on the popularity of redesigned, full-size SUVs. Big commercial vans also enjoyed a boom.

The only cars with strong showings at GM's core Chevrolet brand were the Sonic small car up 12.7%. able the redesigned Corvette, up 309%, though that's still just 2,679 vehicles out of Chevy's 185.930 total.

But trucks, which includes vans and SUVs, rocked. Even the Express commercial van was up 23.5% as the economic recovery continued to encourage tradesmen and delivery services to replace their aging vehicles.

GMC, which only sells trucks and SUVs, was up 10.4%. Yukon, GMC's version of the Tahoe, boomed, up 101.1% from a year ago. The Savana commercial van jumped 70.5%.

GM's Cadillac brand, as at Chevrolet, seemingly couldn't give away cars, despite a fresh lineup, but couldn't keep the hulking Escalade in stock for long. It was up 89.3%, and the EXT long-wheelbase version rose 63.8%.

More important, GM said its average transaction price was highest in the automaker's history -- $33,750, up $500 from July and a stunning $2,900 gain from a year ago.

Caldwell said, "This is very fortunate timing for General Motors, which just recently rolled out new lineups of large SUVs such as Tahoe, Suburban and Yukon. Expect big months for these vehicles in the final quarter of 2014."

Ford Motor said August sales were about flat with last year, but reported some stars among cars.

Fusion mid-size sedan was up 19.5% for its best-ever August. Focus compact was up 8.4%.

Ford Motor's overall truck numbers were unimpressive, but within the total:

Escape small SUV rose 8.5%

Explorer three-row SUV was up 25.4%.

Transit Connect urban van held about flat despite new rivals.

The company's profit machine, F-series pickup, fell 4.2% as some buyers waited to see the aluminum-body 2015 F-150 coming later this year.